Berkshire Hathaway reported a huge year-over-year jump in first-quarter operating profits on Saturday, while its cash holdings rose to record levels.
The Warren Buffett-led conglomerate reported operating profit – which includes income from the company’s wholly-owned businesses – rising 39% to $11.22 billion compared to the same period last year.
This increase was driven by a 185% year-over-year increase in insurance revenue from just $911 million to $2.598 billion. Geico’s profits rose 174% to $1.928 billion from $703 million a year earlier. Income from insurance investments also increased by 32% to over $2.5 billion.
Warren Buffett takes the floor before Berkshire Hathaway’s annual shareholder meeting on May 3, 2024 in Omaha, Nebraska.
David A. Grogen | CNBC
Berkshire’s rail business generated a profit of $1.14 billion, down slightly from the first quarter of 2023. The energy division saw profits almost double to $717 million from $416 million last year.
First-quarter net income, which takes into account fluctuations from Berkshire’s stock investments, fell 64% to $12.7 billion. Every quarter, Buffett calls these unrealized investment gains (or losses) meaningless and misleading, but the unique corporation is required to report these numbers based on generally accepted accounting principles.
Record cash reserves
The company’s cash balance reached a record $188.99 billion, up from $167.6 billion in the fourth quarter. This massive holding, well above a CFRA Research estimate of more than $170 billion, suggests that Buffett is unable to find a suitable large takeover target – something he has complained about in recent years .
Of course, Berkshire reduced its Apple stake by 13%. However, the iPhone maker remained Berkshire’s largest stock holding.
Berkshire also repurchased $2.6 billion in shares, up from $2.2 billion in the fourth quarter of 2023.
The report comes ahead of the company’s annual shareholder meeting, known as “Woodstock for capitalists.” Buffett will answer shareholder questions on everything from the conglomerate’s holdings to his thoughts on investing and the economy.
This will also be the first annual meeting since the death of Vice Chairman Charlie Munger in November.
Berkshire Class A shares have risen more than 11% since the start of the year, reaching an all-time high in late February. The Class B stock has now gained more than 12% in that period.
Check out CNBC’s full coverage of this year’s annual meeting here.
More from Berkshire Hathaway’s annual meeting
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2024-05-04 15:45:09
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